Energy transition in Uruguay Montevideo, 30 y 31 de enero de 2018

Uruguay before transition

Uruguay in context (Source: World Bank)   Uruguay LAC World

Uruguay energy resources Uruguay has: - NO oil - NO natural gas - NO coal - High hydro capacity, but almost NO room for new large power plants. 4 4 4 4

Energy as a developing barrier Restrictive path Weak institutions (DNE-MIEM) Low capacities for prospective Passive rol of energy policy Uncertainty Energy as a developing barrier 5 5 5 5

Before renewable transition: Electricity mix (GWh)   Hydro GO/FO Imports Autoproducers Climate dependence: Huge variations of hydropower: gap covered by oil derivates and imports

Dependence: Share of oil imports in trade balance

Primary global energy mix (2001-2006) 63 % IMPORTED Source: DNE - MIEM

ENERGY POLICY. URUGUAY - 2030

Virtuous path Strong institutions (DNE-MIEM) Agreement involving Government and political opposition Investment in reneawable energies and grid systems. Energy as an opportunity (energy access and local content) 10 10 10 10

Long term Energy Policy (2030) 2008: Council of Ministers 2010: State Policy Special committe including all political parties in Congress. Rol de los actores Matriz energética Demanda Social

Energy Policy – Short term goals (2015) Supply 50% renewables in primary energy mix 25% ERNC in power sector Demand 6% reduction of global energy consumption* 15% reduction of oil in transport * *compared to tendency Social 100% electrification

Energy supply and Renewable energies

WHY RENEWABLES? RENEWABLE SELECTION: NO SUBSIDIES To keep low carbon emissions To avoid fossil fuel imports To drop and stabilize energy prices To build local capacities To improve energy independence RENEWABLE SELECTION: Those that allow a social use, and are sustainable from an environmental and economic perspective. Today: Bio energy (power, heat, biofuels) Solar Thermal (water heaters) Wind Power Solar PV NO SUBSIDIES 14

WIND POWER

- Mandatory local content Wind Energy 2009 - Wind map - First 10 MW farm 2009 - 2013 Tender process: - Mandatory local content - 20 Years PPA - Priority dispatch 2017 - 1.529 MW - Local content: 30% Starting point: 0 MW in 2007 16

Wind Energy price evolution Power allocated (MW) Price (USD/MWh)

Wind Energy installed power (MW)

SOLAR ENERGY

Solar Thermal - Law 18.585 “Solar Thermal energy law” Solar Plan, Solar Thermal promotion, in residential sector 20 20

FV - Microgeneration kW Portezuelo

Solar PV Decree - introduction of Solar energy PV in Uruguay. May 2013 Three ranges: Tender from 0,5 MW to 1 MW Tender from 1 MW to 5 MW FIT from 5 MW to 50 MW Mandatory local content Average price in 2017: 90 USD/MWh 22 22

20 % local content Solar PV 2017: 238 MW 2010: 100 kW 2017: 238 MW 20 % local content Solar PV Plant 50 MW – Salto, Uruguay

BIO ENERGY

BIOMASS 437 MW installed Raw materials: forestry residues, rice husks, bagasse, black liquor. 50% - 60% local content

Biomass plants operating 437 MW

BIOFUELS Biofuels Law (2007) Biofuels (1st generation) + Food + Power (co-generation) + Feeds TOTAL BIOFUELS (m3) 2015: Goal: E5/B5 Production (2016): E9/B6

MICROGENERATION & SELF CONSUMPTION

MICROGENERATION Since 2010 Uruguay enable grid-connected renewable microgeneration. Net metering contract: injections must not exceed consumption in a year time basis. Maximum power 150 kW Low tension connection 29

SELF CONSUMPTION Decree 114/2014 Prosumers (generates and consumes electricity) Not allowed to inject electricity to the grid (only self consumption) Customer remains regulated 30

IMPACT OF THE ENERGY POLICY

Primary global energy mix 2017 59% RENOVABLE 55 % (2015)

Electricity sources mix

Power mix - 2017 More than 97 % Renewable 96 % (2016)

Power Generation (History)

Distributed Power Generation

Medium Supply Demand Cost Parameter: Rain probabilities 73 US$/MWh 46 US$/MWh

Variability of supply demand cost Parameter: Rain probabilities 70 US$/MWh 25 US$/MWh

IMPACT OF THESE POLICIES IN REDUCING EMISSIONS

Emission reduction in Energy Sector

Thank you for your attention!… nicolas.castroman@miem.gub.uy

Energy transition in Uruguay Montevideo, 30 y 31 de enero de 2018